Yes, I know I spelled that out in a very New Jersey, Tony Soprano-esque accent to pay homage to the show that ended Sunday night in the states. The irony is, I watched maybe 4 episodes total in my life but I feel like I know the entire plot because it was all my colleagues talked about back in the United States around the water cooler on Monday mornings.

So, today's blog has to focus on the story in The Straits Times about DBS raising the fee from $1 to $2 for ATM and online transactions for IPO's. Now, I took particular interest in this story because DBS's move is stupid I think, but, I can also see the strategy behind it as some IPO's you are only able to apply to via DBS and not the other banks.

So to drive people and generate more business, they are capitalizing off of that by making a quick buck or two. I don't believe in making a quick buck on something like this as I think it residually hurts your image and brand if your seen as crossing the line of being too monopolistic that you are taking advantage of people instead of capitalizing of something you should be, just like everyone else. DBS was already collecting a fee, but now people may take them more as money hungry hawks for stuff like this given the other banks have not raised their fees.

While it is good business to collect a fee and make money in some cases because they are the exclusive route for some IPOs that people will apply to, it's when they unilaterally do something - something that they have done in this case - that drives people away. Case in point, some guy actually called up and complained to The Straits Times about this 100% increase. If you have upset people that much where it actually drives them to do something like that, you've got issues.

People will switch to the other banks because of this $1 hike, which I think is such a negligible cost difference. Crazy isn't it? Consumers are that price sensitive here they will switch banks. Brand loyalty...fourgedaboudit, doesn't exist as strongly here as it does in other markets around the world (unless, you are selling ladies cosmetics which have an almost cult like following in Asia Pacific where in this case brand loyalty is unusually high).

Either way around, this move is just beyond me as it only gives the competition stronger ground and reason to stand on to undercut DBS on both price and service.

Either way...interesting story.

Curtis Bergh

Labels: DBS, Fees, IPO, Tony Soprano